Carl -
The CD containing the LEGO MINDSTORMS NXT Software version 1.1 includes all the necessary software to program the NXT. You are not required to have a previous installation of 1.0. If you planned on purchasing the upgrade anyway, I would just order that and be done with it.
If, however, you weren't planning on purchasing the update, I'd give LEGO one more shot. I spoke with one of my contacts at LEGO, and he informed me that you should try one more time to contact Consumer Services, 1-800-422-5346. Tell them that you own the LEGO MINDSTORMS NXT Retail kit, give them your product registration information, and ask them if they can send you a 1.0 replacement CD. Make sure they understand you're not asking for the upgrade, the NXT toolkit, or LabVIEW; you're just trying to replace the LEGO MINDSTORMS NXT Retail Software 1.0 CD that your son misplaced. If the person you speak with knows what's what, he or she should be able to come up with a solution.
If they still can't help you, I'll be disappointed along with you. I'm afraid I've run out of strings to pull.
Good luck!
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James Blair
NI R&D